Course Name
Financial Statement Analysis for A&C (BSc)
Course Code
EBB116A05
Secretary
Secretary of Accountancy
5411-959
+31 50 363 3768
accountancy@rug.nl
Course Coordinator and Lecturer(s)
Dr. Y. Karaibrahimoglu
5411-963
y.karaibrahimoglu@rug.nl
Lecturer(s)
Dr. S. Rusanescu
5411-817
s.rusanescu@rug.nl
Course Term
Block 1.1
Course Credits
5 EC
Date of Last Change
01-09-2022
1. Educational Goals
Upon completion of the course, the student is able to:
1. Describe and explain the role of accounting information and intermediaries in the economy.
Describe and explain four key components of financial statement analysis: business strategy, accounting,
financial, and prospective analysis.
2. Describe and explain two important valuation concepts: the discounted cash flow model and the discounted
abnormal earnings model.
3. Apply the business analysis and valuation framework in the context of security analysis, credit analysis, merger and acquisition, and financing policy analysis.
4. Describe the different forms of communication with investors in the context of corporate governance.
5. Present his or her opinion about simple business analysis and valuation cases group-wise orally.
6. Write his or her opinion about a complex business analysis and valuation case group-wise.
2. Course Content
This course provides a framework for using financial statement data in a variety of business analysis and valuation contexts. Financial statements are the basis for a wide range of business analysis. Managers should pursue
and evaluate potential new businesses to acquire as part of their investment strategy. Security analysts use financial statements to rate and value companies they recommend to clients. Bankers use them in deciding
whether to extend a loan to a client and to determine the loan's terms. Investment bankers use them as a basis
for valuing and analyzing prospective buyouts, mergers, and acquisitions. Consultants use them as a basis for
competitive analysis for their clients.
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3. Literature
Business Analysis and Valuation (IFRS edition), Palepu, K.G., P.M. Healy, and E. Peek, Fifth Edition, Cengage
Learning EMEA, ISBN 9781473758421
4. Entry Requirements
For E&BE students: the course builds upon the topics discussed in the courses Financial Accounting for A&C
and Asset Pricing and Capital Budgeting, and students have to be familiar with those topics.
For BDK- A&C profile accountancy students: the course builds upon the topics discussed in the courses Financial Accounting BDK, Financial Management BDK, and Advanced Financial Accounting, and students
have to be familiar with those topics.
5. Work-form and Organization
Lectures: The course consists of 6 lectures (on campus).
Tutorials: The course consists of 6 tutorials (on campus). The planning of lectures and tutorials, and the list
of assignments can be found at the end of this course manual.
Presentation: The course has a presentation assignment about real company practice questions, which will be
prepared in groups. Each week, scheduled groups will make their presentation for one of the practice questions
and upload their presentation to Brightspace before the tutorial (the menu: “Group presentation → Group
presentation upload”). The group presentation should be no more than 10 minutes. The group presentation
can be made by the whole group or selected members of the group.
The schedule for the group presentations, the list of assignment questions and the name of the company will
be announced on Brightspace. Unless it is indicated otherwise, it is assumed that group members equally
contribute to the practice questions. Each group member will receive a grade (maximum 10 points) based on
the content and the quality of the presentation and solution, and their questions and feedback to other groups’
presentations. The presentation grade will be added to the group project grade (see section 8 of the course manual
for additional details).
Students learn a lot from their peers. To enhance the interaction between students, in each tutorial all other
groups are expected to provide feedbac/ or ask questions to the presenting group using Jamboard. The link to
Jamboard is available on Brightspace, in the group presentation assignment.
If a student does not have a group presentation, the student will receive a “0” for the group presentation.
Group Project: The course has a group project assignment. Groups will upload their draft project to Brightspace (the menu: “Group project → XX Draft upload”). In total, students will upload 4 drafts and 1 final
version of the project. For each draft submission, each group member will receive a grade (maximum 5 points)
based on the quality of the content. For the final submission, each group member will receive a grade (maximum
70 points) based on the quality of the content.
Further details for the group project can be found on Brightspace, in the group project assignment. Students
should upload the digital version of the group project to Brightspace (the menu: “Group project → Final
Draft upload”).
The group composition for preparing the project is equal to the group composition for preparing the presentation assignment in the tutorials.
If a student does not have a group project, the student will receive a “0” for the group project. If students do
not pass the course, their grade for the group project and presentation will be retained in the following year(s)
(only if students prefer so). Please see section 6 of this course manual to learn how to retain this grade.
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Exam & Resit: Both the exam and the resit will be on campus digital exams. The mock exam is available on
Brightspace.
6. Group Enrolment
New students: To make the group project and group presentation, students have to self-enroll in one of the
groups.
Repeating Students: Repeating students may either (1) self-enroll for a new group and re-do the presentation
and group project or (2) retain the group project and presentation grade from previous year(s) by self-enrolling
for the group called “Repeating students”. If a repeating student decides to enroll for a new group, the
repeating student is not allowed to change his or her decision about enrolment, and the following rules will be
applied.
Enrolment for the groups will be made via Brightspace. See the section “Group enrollment” in the “Course
orientation” menu. Each group has a limited number of attendants. Once the limit has been reached, there is
no possibility anymore to enroll for that particular group. Please note that the group you enroll for determines
the tutorial group you have to attend. A group consists of 5-6 students (there might be exceptional cases with
a different number of members). There are 24 groups in total. The group enrolment will be on Friday,
September 9, 2022, between 9 am – 5 pm. After this date, you are no longer allowed to enroll for a group.
Once a student enrolls for a group, this means that the student will make the group project and will contribute to the solution and the group presentation questions. Students who enroll for a group but do not contribute
to the group project and presentation will get a “0”.
7. Attendance
Attendance for tutorials is not compulsory but is strongly recommended if you have any questions regarding
the chapters covered in that specific week. Students who do not attend the tutorials without any valid excuse,
are not allowed to ask aquestions to the lecturers about the tutorial content.
8. Assessment and Conditions to obtain a final grade
The lowest pass grade for Financial Statement Analysis is 55 out of 100 (5.5 out of 10).
The final grade will be calculated as the weighted average of (a) the total grade of the group project and presentation (25%) and (b) the final exam score (75%).
The final exam is max. 100 points. The group presentation is max. 10 points. The group project is max. 90
points.
Special Rules for Grading:
Group Project and Presentation Grade (25%):
Students must obtain at least a 50 out of 100 (5.0 out of 10) from the final exam for the grade of the group
project and the group presentation to be included in the final grade.
Group presentation grade will be directly added (without taking any percentage) to the group project grade.
The grades of the group project and group presentation will be valid both for the regular exam and the resit. If
students do not pass the course, their grade for the group project and presentation will be retained in the
following year(s) (only if students prefer so).
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9. Planning
Wk.
Lecture/Subject
36
Lecture 1: Framework and
Strategy Analysis
Literature for Lec- Tutorials/Assignments
ture
Chapters 1 and 2
37
Lecture 2: Accounting Analysis
Chapters 3 and 4
38
Lecture 3: Financial Analysis
Chapter 5
39
40
41
Lecture 4: Prospective Analysis Chapter 6
Forecasting
No Lecture
Lecture 5: Prospective Analysis Chapters 7 and 8
Valuation
42
Lecture 6: Equity Security and
Chapters 9 and 10
Credit Analysis
43
No Lecture
45
5
Digital Exam (10-November-2022 08:30-10:30)
Digital Resit Exam (2-February-2023 08:30-10:30)
No Tutorials
Tutorial 1
Chapter 1: E1, E3, P1, P2
(optional self-study)
Chapter 2: E5
Tutorial 2
Chapter 3: P1, P3
Chapter 4: E3, E12
Tutorial 3
Chapter 5: P1, P2, P3
No Tutorials
Tutorial 4
Chapter 6: E5, P1
Tutorial 5
Chapter 7: P1
Chapter 8: P2
Tutorial 6
Chapter 9: Q5, Q9
Chapter 10: Q2, Q4, Q6, Q9
- The assigned materials might be updated during the period.
- Please see the detailed/updated schedule on the rooster (https://rooster.rug.nl/#/en/2022-2023/schedule/course-EBB116A05)
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